Retirement in the 21st Century

A lot has changed over the last few decades, especially when it comes to saving for retirement. Certified Financial Planner Bruce Hagan says, for most people, the picture of retirement seems to be different now.

"A number of factors have driven those changes including greater mobility in the workforce, fewer companies outside of government offering pensions, longer life expectancy, and changing demographics," he said.

Hagan says companies and employees have less loyalty to each other now than they did years ago. He also said people seem to hone their skills at one place and move on to bigger and better things.

"Companies are leaner, don't have as much middle management and a ladder for people to climb. Employees develop skills and are more likely to market those skills to competing companies," said Hagan.

Hagan went on to say, "We're finding a large number of baby boomers who are beginning to enter the traditional retirement ages have not saved enough. You know if you've saved a quarter of a million dollars that sounds like a lot but if you're going to live off the interest generated from that, at 4% that only produces $10,000 per year, less than $1,000 per month."

"According to The Economist magazine, the first pension can be traced back to 1889 and was introduced by a gentleman named Otto von Bismarck," said Hagan. "It was for workers over age 70 and at that time the average life expectancy was about 45. Today it's about 78 and for a couple both age 65, there's a 50% chance at least one of them will live to 90. Also, the demographics of the country indicate there are fewer people coming behind the baby boomers to work and pay social security taxes to keep it running."

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